Operational Improvement Plan |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operational Improvement Plan |
Operational Improvement Plan Beginning in the second quarter of fiscal year 2025, management implemented an operational improvement plan (the "Operational Improvement Plan") to reduce costs and improve efficiency of certain company-wide functions. These costs pertained primarily to workforce reductions and the actions for this plan are expected to be completed by the end of fiscal year 2025. In the third quarter of 2025, the Operational Improvement Plan was modified as a result of the relocation of our corporate headquarters and the relocation of our inventory as a result of a change in third party logistics providers.
Headcount was reduced by approximately 48 employees across the Company as part of the Operational Improvement Plan. An incremental headcount reduction of 15 employees resulted from the modification of the Operational Improvement Plan in the third quarter of 2025. No liabilities were excluded due to the inability to estimate fair value. For the three and nine months ended September 30, 2025, the Company recorded $788 and $2,937, respectively, for severance expenses as part of the Operational Improvement Plan. As of September 30, 2025, the Company had accrued severance costs of $1,362, which are expected to be fully paid out by the end of the first quarter of fiscal year 2026. Severance costs are included in the consolidated statement of operations line "Salaries, wages, and benefits".
In addition to severance costs included in the Operational Improvement Plan, the Company incurred $702 of transition costs for both the three and nine months ended September 30, 2025. These costs are primarily reported as "General and administrative expenses" in our consolidated statement of operations.
As of September 30, 2025, accrued restructuring costs related to the 2025 Operational Improvement Plan, consist of the following (dollars in thousands, unaudited):
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